A Car Guy's Electric Moment

If GM gets it right, the forthcoming Chevy Volt could end up making the whole idea of "miles per gallon" obsolete. The long-used mpg metric is useful, says Jon Lauckner, who as vice president of global product planning has overseen the development of the Volt. But, he says, it can "also lock you into a paradigm that tends to lead to a similar set of solutions to the problem." In other words, something like the Volt can only happen when people completely rethink the way a car is made. The Volt is intended to be a breakout.

It is also, in a way, restitution for GM's missing the boat on hybrids. In the early 1990s, GM showed a concept car that was remarkably similar to what became the Prius. But it decided the economics didn't make sense and killed the project. "The expression, 'We could have done it,' certainly applies," Lauckner says ruefully. "In retrospect, we undervalued the fact that having a vehicle like the hybrid meant being able to claim fuel economy leadership for the whole passenger car industry." GM is determined not to make the same mistake again.

In August, GM opened a 160,000-square-foot factoryin Brownstown Township, Michigan, to make lithium-ion battery packs. It's thefirst such plant operated by a major carmaker, and the idea is for GM eventually to control the development and entire production of future batteries, which it sees as a way to carve out a competitive advantage in an oil-constrained world.

The entire Volt effort — a $1 billion investment and growing — is the sort of gamble Lauckner loves. "Risk is my friend," Lauckner told the Atlantic Monthly last year. "I like risk. You either go big or go home." And Lauckner is determined to go big. As a third-generation GMer, he is fiercely committed to restoring a sense of greatness to America's biggest car company. The following is his description of why and how GM decided to make the Volt.

We Began by Talking

In late 2006, Bob Lutz [the former president of Chrysler who came to GM in 2001 to oversee product development] wanted to unveil a game-changing concept car for the 2007 Detroit Auto Show. He enlisted me to develop the propulsion concept that would be the centerpiece of this show car.

If you are going to do a concept car that lives up to the description of "game-changing," you need to do something that tests the technological limits. But you can't go out there with something laughable, either.

So Bob and I picked each other's brains about various concepts. He admired the work Tesla Motors [a Silicon Valley car company] had done to develop a battery-electric roadster — a small, light two-seat car. Bob thought we ought to take a look at a pure battery-electric car. We kicked that around, but for the kind of car we were thinking of — one that average families would use — the battery would have to be enormous to have a decent amount of range.

I said, 'OK, how about taking a different approach?' My idea was to have just enough battery on board for most people to drive their daily commute; for longer distances, there would be a small internal combustion engine, to create more electricity. The beauty of this concept is people can plug in where they work or play, and when electricity isn't available, the car can still function.

In retrospect, these conversations were the decisive moment for the whole project. At the time, we didn't see it as a billion-dollar decision; it was about striking out in a bold new direction and showing that GM could be a technological leader again. There's a lesson in there — sometimes decisions that wind up having the largest consequences start with something relatively modest.

Once we decided on the broad concept behind the Volt, we approached things very methodically.

We Changed the Rules

When we first started talking about what became the Volt, we were thinking in terms of the existing paradigm — miles per gallon — that was the traditional measure of how to measure a vehicle's efficiency. Another key moment was when we turned that idea on its head and began to think in terms of how much fuel we could not use — that is, about how to avoid the use of liquid fuel altogether. By not making miles per gallon our focus, we opened our minds to thinking differently about what cars do.

Even the best batteries in the world don't have close to the energy density of gasoline or diesel fuel; the difference, in fact is about two orders of magnitude (100 times). The Volt's state-of-the-art lithium-ion battery pack can go about 40 miles. It is T-shaped with the longer side six feet, the shorter one, three feet; it weighs about 400 pounds. Now think about the amount of gasoline it takes to move a car like the Volt 40 miles — no more than a gallon. I can easily hold that much in one hand. That's why gas or diesel has been the fuel of choice for more than 100 years.

We Started with a Small Team of Experts

Just a few dozen people working part-time refined the rough calculations to make sure we could deliver a vehicle that would meet a typical customer's expectations. Since there wasn't time to build an actual working prototype, we did a lot of computer simulations of how the vehicle would perform: acceleration, top speed, energy consumption, and range. During the spring of 2006, the team further detailed the idea pretty quickly. We met weekly to discuss various technical questions and define the vehicle as concretely as possible. At about the same time, Vice President of Global Design Ed Welburn had our design studios start a "sketch blitz" to develop the interior and exterior styling for the concept car.

We Went Virtual

My role was to prove that technology was feasible, then take the first steps to move the project toward production. There are two ways to do this. One is to build a full-fledged vehicle; that is very expensive and time-consuming because you have to create every single part. The second way, which we chose, was to create a vehicle that doesn't exist physically, but only as a series of simulations.

For example, we were able to validate our assumptions about the power and size of a battery without actually having the exact propulsion system components on hand and inside a vehicle. In fact, the vehicle itself could be represented virtually. In the simulations, the battery pack is just a "black box" with defined inputs and outputs. Later, when you do all the detailed engineering, the exact design and performance of the battery has to be developed and tested.

We wouldn't necessarily do it this way for something like a new mid-sized car. In that case, we could take a current model, add ballast to create a new weight, change the aerodynamics by fiddling around with sheet metal, and modify an existing power train.

But for a car like the Volt that was breaking new ground, there wasn't an existing vehicle to work from, so virtual simulation was the only way. We can do a lot of rapid iterations and get a basic understanding, for example, of how big the battery or electric motor needs to be for a car of a given mass and aerodynamic qualities. Of course, if the concept car is later taken to production, it's necessary to build prototype vehicles to run physical tests on the car and its components. But for a concept car, it's really only necessary to make sure the concept is solid.

There was another thing we did differently with the Volt. Typically, GM develops new technology such as a new propulsion system and then applies it to one or more vehicle programs. But because we wanted to get the Volt to market fast, we decided to develop the propulsion system at the same time the vehicle engineering was taking place. Then we would marry the two down the line.

We Looked at Our Customers' Habits

Cars today can go hundreds of miles on a single fill-up. About 80 percent of Americans and Europeans drive 40 miles or less a day. And from our EV1 experience [an electric car experiment that was discontinued in 2002], we knew that one of the biggest turnoffs of pure electric cars was that people fear running out of juice. We call it "range anxiety."

But if you could create a car with a battery that most people could drive during their normal daily commute, and you could guarantee that folks would never be stranded could that concept of an electric vehicle work and be affordable? We believed the answer was yes.

We Built the Concept Car

By early summer in 2006, we had a clay model; by the fall, we had refined the concept, defined the vehicle completely, and kicked off the work to create the concept car we unveiled in 2007.

Throughout the development of the vehicle, having someone involved who was influential in the company and as respected in the industry as Bob Lutz was very helpful. There was naturally some degree of internal skepticism about developing this vehicle, particularly about the lithium-ion battery pack because it had never been done for a high-volume vehicle. Bob Lutz had the influence and ability to make sure we didn't get stalled. When he said he wanted a game-changing concept car for the Detroit Auto Show, the reaction was, "OK, let me know what you need."

We Went to the Product Board

In late 2006, we went to the GM Automotive Product Board for a final review. We had made a couple of progress reports, but this was the first time we reviewed the concept in detail. We were able to show that the concept was sound and that the idea was in tune with the times. More important, we made the case that it broke the miles-per-gallon paradigm, which intrigued a lot of people. Yes, we acknowledged there was risk involved because the technology was not proven and the market reaction was difficult to gauge because it required customers to interact with their vehicles differently (plug it in nightly). But we convinced them that this was something we needed to try. On that basis, they told us to go ahead and make a concept car for the Detroit Auto Show, where it met with huge enthusiasm.

We Went to the Board of Directors

Then the question became, should we take it to production? This is a much larger investment, in both money and time. Because we already thought through so many of the big issues, it was not difficult to get the go-ahead. But it required the approval of the GM Board of Directors.

The meeting happened the night before the regular board meeting in early February 2007 in the Design Dome at the GM Tech Center. In the dome, we presented the Volt concept car as well as the chassis cutaway models. We also reviewed eight other hybrid and alternative propulsion vehicles.

I showed perhaps 10 charts on the Volt that described the concept and the technical challenges to bring it to market. Due to the critical acclaim that the Volt received at the Detroit Auto Show, the board encouraged us to take the next step and create an actual production car.

Many months later, after we developed the production car, we went back to the Board and received approval to invest in the machinery and equipment to build the Volt, a battery lab, and a battery pack assembly facility.

This was not the typical process to develop a car. Normally, a portfolio of models is developed several years ahead, and the plan gets adjusted as required. The Volt was completely different: It started as a concept and became a full-fledged production project in record time.

The Road Ahead

Notably, the Volt will be the first high-volume production vehicle that doesn't use petroleum as its primary "fuel" ? an idea that looks more and more attractive whether the topic is the environment, sustainability, foreign policy, or even energy security.

In addition, the Volt is part of a bigger picture toward electrification of the automobile. The underlying technology will be applicable to other types of electrically powered vehicles. So for us, this is not just about getting the Volt on the road; it is the first step in a strategic drive toward a number of electric-based propulsion architectures.

There has never been any looking back. Even at the end of 2008, when the economy suffered a meltdown and GM was in bad financial shape, and throughout 2009, there was never a serious discussion to put the Volt on ice. It was and still is one of GM's highest priorities.

Setting the Price

We haven't established the retail price for the Volt, but it will likely be more than $30,000, making it more expensive than a typical mid-market car. Over time, though, the higher initial price will be offset by lower running costs, due to the relatively low cost of electricity per mile driven compared to gasoline. And federal, state, and local governments have also created incentives to stimulate demand for electric-powered vehicles.

Frankly, the cost of the new propulsion technology is much higher than a normal car because it is still in its infancy. But the cost of critical components, including the battery pack, power electronics, and electric motor, will come down as we build economies of scale and develop more innovative ways to deliver the same function at a lower cost. The gasoline engine has a 100-year head start. That will take some time to overcome. But you have to start somewhere.

The Volt, by itself, is not going to change the financial fortunes of companies in the near term, and itwill be a small part of GM's financial picture for some time to come. But let's see where it goes. Every big tree starts with a little seed. Whether you are a supporter of the Volt or not, you have to acknowledge that it has changed the conversation.